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SO CLOSE, BUT YET SO FAR

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SO CLOSE, BUT SO FAR

It was bound to happen sooner or later. This month we'll be experiencing our sixth losing month out of the 68 months since we began our Couch Potato Trader portfolio.

On Tuesday, the SPX got too close for comfort (1200) and I sent out a suggestion to GTFO of our 1190/1180 bull put spread position at $2.70. Right on cue, the market turned on a dime and never looked back - and took our dime, too!

Fortunately, it takes a while for the alert system to get the emails into your mailbox. Many who took the time to look at the market before placing the trade saw the reversal and held off placing the trade. As the July cycle settles tomorrow, they will end up being the winners this month.

Then, there are the traders like me who immediately closed the position. Because I was afraid the market might go to 1170 before the day was over. I would rather close the 10-point spread for $2.70, than to risk the other $7.30.

Prior to Tuesday's downward spike, we had done everything just right. I hope you were paying attention. Earlier this month, our initial SPX bull put spread was threatened. We bought it back and rolled down 60 points. We took in some nice premium. Plus we added a bear call spread, also taking in some nice premium.

If those positions had expired worthless, our portfolio would have actually been profitable for the entire cycle. Ahh, the best laid plans of mice and men. Go back and review the close out-roll out columns. It's an excellent choice - one of a few. We go into great depth on these adjustments at the seminar.

The point is that we put ourselves into position to be profitable. That's all we can do. We play the percentages. Forget that the market reversed this month. That's going to happen, but we can't count on it happening. Playing the percentages is what is going to keep us healthy and wealthy over the long run. In these markets, when most traders are having their ass handed to them, we haven't done badly at all.

I'm proud that we?ve had a 10-month winning streak. We're going to have a lot of them. And, if we can keep our losses (expenses) to only $2.70 on an occasional 10-point spread, we are going to post some very nice numbers.

Tomorrow's Settlement Will Be Exciting
Our remaining positions are very safe - thank goodness. There are always some traders who get greedy and are now sweating the Friday morning settlement. After the close, Google missed expectations and traded as low as about 470 (63 points below its Thursday close). Google has since rallied back about 20 points. Also, Microsoft missed and is getting nailed after hours. IBM did well, but I doubt that's going to offset the bad numbers by Google and Microsoft. Merrill Lynch disappointed as well.

So, for tomorrow's opening - watch out below! More numbers will be out Friday morning before the open, so anything can happen, but right now lower appears to be the direction - at least for the open.

I wouldn't be surprised to see the market turn positive by the end of the day. Our relief rally was rudely interrupted by these numbers. I think they may be overlooked and that the market will bounce back. But, keep in mind, my directional instincts suck. Don't bet on them.

Quickie Update
It appears that our quickie trades may end up profitable again. Even the down opening doesn't look like it will spoil the party. No one is more surprised than I am. Profitable quickies seem to be a pretty regular occurrence. I wish I had the balls to trade them myself.

Friday Position Watch
Our Zero Plus strategy position will expire tomorrow. I'll be looking for a new position for both the Couch Potato portfolio and the Zero Plus ongoing strategy. I'll be watching closely to see how far down the market tanks as a result of the bad earning's announcements. I might be tempted to put on a far OTM bull put spread on the RUT. It seems the RUT has been, on the whole, quite a bit more stable than the SPX.

Settlement Reminders
If you have a progressive broker, like Mike Cavanaugh, your maintenance dollars will be released on Friday in case you need the money for potential trades. If your broker doesn't release your dollars, you have the WRONG broker. There are a few that do and many many more that don't. If you don't know your broker's policy, give them a call. While you have them on the phone, ask about customer portfolio margining -- another great tool that will give you much more flexibility in your trading.

In the long run, it can make a significant difference in your trading. Contact me (Contact Support) and I'll be glad to give you Mike Cavanaugh's contact information.

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NEW SEMINAR DATES ANNOUNCED!

After a very special sold out Las Vegas seminar, I've put together two new seminar dates along with Early Bird Special dates.

OCTOBER 4 & 5 - DALLAS, TEXAS

DECEMBER 6 & 7 - ORLANDO, FLORIDA

You will save $100 if you complete your reservation for the DALLAS seminar by August 17th. Your two days of education and enlightenment will cost only $895.00.

You will save $100 if you complete your reservation (including payment) for the ORLANDO seminar by October 1st. Your two days of education and enlightenment will cost only $895.00.

If you can, plan to stay a third day. Mike Cavanaugh, my esteemed broker, will be giving a comprehensive presentation on the Monday following the two seminars. You are invited to attend - at NO CHARGE. Don't miss it.

Contact me as soon as possible. Send me your phone number (Contact Support) and I'll personally call you to reserve your spot and to answer any questions you may have. Both locations are great vacation destinations. The earlier you get your airline tickets, the cheaper they?ll be.

RETAKES
Seminar grads who want to schedule their free retakes should contact me immediately (mparnos@optioninvestor). There are only five retakes per seminar and are first come first served. They go quickly. He who hesitates stays home.

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CPTI JULY POSITIONS

CPTI July Position #1 - RUT Bull Put Spread - 696.63

On 5/23, with the RUT at about 735, we sold 20 RUT July 620 puts and bought 20 RUT July 610 puts for a credit of $.65 ($1,300). Maintenance is $20,000.

CPTI July Position #2 - RUT Bear Call Spread - 696.63

On 5/28, with the RUT at about 732, we sold 10 RUT July 810 calls and bought 10 RUT July 820 calls for a credit of $.50 ($500). This bear call spread completes an Iron Condor for 10 of the RUT bull put spreads previously put on 5/23.

CPTI July Position #3 - SPX Bull Put Spread - 1260.32

On 5/30, with the SPX at about 1399, we sold 20 SPX July 1250 puts and bought 20 SPX July 1240 puts for a credit of $.60 ($1,200). Maintenance is $20,000. Position closed for debit of $3.05 ($6,100).

CPTI July Position #4 - SPX Iron Condor - 1260.32

On 6/27, with the SPX at about 1275 we rolled our 1250/1240 bull put spread position into a 25 contract 1190/1180 bull put spread for a credit of $.80 ($2,000). Then, on 7/7, with the SPX at about 1372, we sold 25 1340/1350 bear call spreads for a credit of $.55 ($1,375).


Closed 25 July 1190/1180 SPX bull put spread for $2.70 ($6,750). See Sunday's column for explanation and breakdown.

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CPTI AUGUST POSITION

CPTI July Position #1 - SPX Bull Put Spread - 1260.32

On 6/19, with the SPX at about 1342, we sold 20 SPX August 1170 puts and bought 20 SPX August 1160 puts for a credit of $.65 ($1,300). Maintenance is $20,000. I'll look to put on a bear call spread in the future - IF it makes sense.

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ONGOING STRATEGY - THE ZERO-PLUS Strategy
In the past, I outlined a strategy based on an initial investment of $100,000. At that time, $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment. We are not compounding our profits by dramatically increasing the number of contracts we trade. With the May profits, our new cash total is $62,110 ($60,460 $1,650).

JULY ZERO PLUS POSITION - RUT - 606.63

On 5/20, with the RUT at about 721, we sold 30 RUT July 610 puts and bought 20 RUT July 600 puts for a credit of $.70 ($2,100). Maintenance is $30,000. We will look to put on a bear call spread in the future - IF it makes sense.

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SHORT & SWEET - RUT - 696.63

On 5/18, we opened a new hypothetical ?Short & Sweet? position, selling 4 December RUT 530 puts and selling 4 RUT 930 calls for a total credit of $10.30. Then, we purchased 4 of the July 550 puts and 4 of the July 890 calls to give us two months (June & July) of protection for $.60. Our net credit, thus far, is $9.70.

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SEMINAR DATES -

DALLAS, TEXAS - October 3, 4 & 5

ORLANDO, FLORIDA - December 6, 7 & 8


62 OUT OF 67 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
LEARN OUR COUCH POTATO WEALTH-BUILDING TECHNIQUES!

I've negotiated excellent low room rates for both seminars. Check your calendar and contact me as soon as possible. Send me your phone number at - Contact Support. I will personally call you to go over the details and to answer any questions you may have.

Also attending (and speaking) in Dallas and Orlando will be Mike Cavanaugh, my personal broker and option strategist extraordinaire. Actually, he knows this stuff better than I do. I guarantee you'll be impressed.

Take your trading from a "hobby" to a profitable "business." You need the information you'll learn at my CPTI seminar. You'll learn more than the "how to's" of trading our strategies. You'll learn a new lifestyle - one that can last a lifetime.

DO YOU HAVE PROFIT-ABILITY?
It's always a challenge (and a pleasure) for me to have a roomful of bright people who have a passion for, and are excited about, learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys -- not just the hows. That way, they're prepared for the best (and the worst) - and know the best way to handle either situation. Contact me and I'll personally call you with all the details.

If you're a SERIOUS options trader, you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills. Contact me ASAP at mparnos@optioninvestor.com. Send me your phone number. I will personally call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade. Take advantage of the "early bird special" and save $100. You'll have a two-day experience that you'll remember, and profit from, for a lifetime. I limit my CPTI seminars to ONLY 25 ATTENDEES. And, as a bonus, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!

You should definitely attend one of my seminars. With what you learn, you'll see a substantial increase in your trading results. Contact me at: mparnos@optioninvestor.com. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?


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Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.

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